LONDON — Tribune Publishing Co., owner of the Los Angeles Times, has rejected Gannett Co.’s revised takeover bid to acquire the entire company for $15 per share, but said Monday that it was open to further discussion of a potential deal behind closed doors.
Separately, Tribune also announced that it had entered into a pact with Nant Capital under which it will receive a $70.5 million investment in exchange for stock.
Following the transaction, Nant Capital will own 12.9% of Tribune’s outstanding shares, making it Tribune’s second-largest shareholder. Nant Capital founder Patrick Soon-Shiong is to join the Tribune board as vice chairman.
The Tribune board said it had invited Gannett to agree to a mutual non-disclosure agreement under which both parties could “engage in due diligence and discussions to assess whether a transaction in the best interests of Tribune and Gannett shareholders can be negotiated.”
In a statement, Tribune CEO Justin Dearborn said: “We remain unrelenting in our pursuit of value whether on a standalone basis or through a transaction, and believe the $70.5 million growth capital investment announced today from Nant Capital…will support Tribune’s transformation strategy.”
Dearborn expressed “serious doubts” about Gannett’s ability to enter into a transaction that made sense for Tribune, given Gannett’s approximate $650-million pension and OPEB (other post-employment benefits) liability. But he added that the board stood ready to work with Gannett to “assess whether there is a path forward.”
Dearborn continued: “Regardless of the outcome of the discussions with Gannett, we are confident that we have the right strategic plan in place to leverage technology and effectively monetize our world-class content.”
Tribune Publishing was spun off from the former Tribune Co. in 2014 and owns a clutch of newspapers across the U.S., including the Los Angeles Times, the Chicago Tribune and the Baltimore Sun.
Like many American newspapers, the Times has struggled with continual budget and staffing cuts in recent years, including several changes of publisher and a buyout last November that resulted in the departure of dozens of senior reporters and editors. Daily circulation, which topped 1 million a quarter-century ago, is now barely half that.
Rumors have constantly swirled around a purchase of the paper by local tycoons Eli Broad and Ron Burkle, and by Australian media titan Rupert Murdoch, but the Tribune Co. has consistently rebuffed such overtures.
Last month, the Times won a Pulitzer Prize for its reporting on last year’s mass shooting in San Bernardino by a husband and wife motivated by radical Islam.